I haven't heard much news since their first public appearance. And the Beta testing hasn't started yet, either. Their site still says "Coming Soon Winter 2009".
If it does ever come out, it would be pretty awesome for those of you who have high bandwith. I get around 8mbps, which would be fine (or so they say) for the 720p streaming.
They did show a demo at one point. But yeah, I'm with you. This would be amazing if it actually worked. My only problem is I like the physical media, reassuring me that I actually own the game